Millionaires are supposed to be immune to the sorts of things that the rest of worry about, but it appears that the property slump has finally caught up with the WAGs and trust fund babes in their multi-million pound mansions.

So what is happening to prices and why?

Prices fall

PrimeLocation.com's Prime Index shows what's happening to the asking prices of the 25% most expensive properties in the UK. It has revealed that prices fell for the second month in a row over the summer. It means the average price fell 1.3% - or £6,234 over a two month period to £476,302.

What's more, the decline is accelerating - with a drop of 0.5% in July and 0.8% in August.
The movement was even more pronounced in some parts of the country. In Scotland asking prices were down 2.6% in the two months, in London they were down 1%, and in Wales they fell 0.9%.


Lawrence Hall of PrimeLocation.com says: "The market for the UK's most valuable homes is a resilient and healthy one, which is why this mid-year fall in prices is worth taking note of."

So what's going on?

The time of year isn't the culprit, because this time last year prices were rising - they went up 0.5% in July and 0.1% in August - and were up £2,900 over the two month period.

Clearly the drop in Scotland had a big impact on the overall figures. One high-end agent who wished to remain anonymous said that ever since the talk of an independence referendum, the interest from buyers had started to dry up - as they waited to discover the outcome.

Among the very top end, there's the chance that higher stamp duty has dampened the market - along with a clampdown on tax avoidance from individuals buying properties through a company.

However, more broadly, Hall says there is a possibility that it marks the onset of realism among sellers, who wanted to capitalise on the uptick in footfall in September, before the traditional winter slowdown. He suggested it might be: "sellers getting ready and adjusting prices for the September market."

Future?

If that is the case, this is unlikely to be the last of the falls, as sellers across the country see similar houses cutting prices, and have to cut their own in order to compete.

However, Hall says we have a long way to go before anyone ought to start panicking, particularly Londoners who have shaved off 1% of their asking prices, but are still up over 16% in a year. He says: "It's important to remember just how solid the London Prime property market is. It would be naive to overlook any two-month price decline but Prime homeowners shouldn't be alarmed, the market is strong, demand is high and asking prices are still significantly more than this time last year."

Price changes since June

Scotland -2.6%
London -1%
Wales -0.9%
West Midlands -0.8%
North West England -0.6%
South East England -0.4%
East Midlands -0.2%
East of England -0.2%
South West England 0%
Yorkshire and Humber 0%
North East England 0.1%

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